2015 Resolutions To Spend Less On Gas May Be Possible
We love to complain about how much gas costs and for the past decade, it has been a ripe topic for conversation. Well, maybe this year you won’t have to groan any longer.
The U.S. Energy Information Administration (EIA) released a report in early December that says the average American household is expected to save $550 on gasoline in 2015, in comparison to 2014.
In fact, the EIA reports that gas expenses are predicted to fall to their lowest in 11 years at about $1,962 per average household this year.
Gas prices fell steadily in the last few weeks, according to the EIA, and they are expected to continue to do so in the New Year.
In Massachusetts, gas prices are at the lowest they have been in 5 years, CBS reports.
Why is this happening?
Well, it’s complicated. But, basically the price of “crude oil’’ has gone down. Crude oil, or unrefined petroleum straight from the ground, has hit a 5 year low in cost, according to Reuters, causing broader issues for the oil industry.
AAA says that the reason for this drop is that there is currently an abundant supply of oil and less of a demand worldwide for using it.
This global surplus has a lot to do with the US producing more oil than they have in more than three decades, Bloomberg reports. The Wall Street Journal reported that while the US has begun to scale back production, it could take a long time before the lower production makes an impact on the market.
AAA warned that these low prices could affect the ability for the US to produce oil domestically, due to high production costs. It also has started to affect other countries – like Russia, whose economy has suffered from these low prices, according to Reuters.
But for Americans looking to fill up, this is pretty good news, and they seem to already be taking advantage.
AAA reported that the number of Americans travelling during the holiday season was up 4 percent from last year, both for air and road travel. Gas cost 70 cents less than it did during the holidays last year.
The decrease cost in oil could be one of the reasons Americans have had an increasing desire to own trucks, SUV and other gas-guzzlers this year, according to TIME.
And falling gas prices affect more than just drivers’ desire to take a road trip.
Gas prices can affect where people decide to live and where houses are built, according to The Washington Post. When gas prices are on the rise, there are fewer houses constructed in areas that are far from job centers. A Federal Reserve study implied that lower gas prices could increase the desire for home construction in the suburbs, as more people might be willing to commute to work using a car.
While important to think about the broader economic implications of this drop in price, take advantage of it while you can.
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